Australian fund in $1.6 billion deal to buy 10 U.S. malls from Forest City

Reuters Staff

2 Min Read

(In this October 3 story corrects deal value to $1.6 billion, not $3.1 billion in headline and text)

By Paulina Duran

SYDNEY (Reuters) - Australian fund manager QIC has reached a deal to buy out 10 regional malls in the United States from its joint venture partner Forest City Realty Trust Inc (FCEa.N) on behalf of a client which it did not identify.

Forest City said the deal values the total portfolio at $3.1 billion and its stake at $1.6 billion.

Four years ago, the A$82 billion Australian fund, which manages assets for institutional investors, formed a partnership with the New York listed Forest City.

“We are encouraged by the broader economic conditions in the U.S. and the resilience of the consumer as demonstrated by continuing strength in the underlying fundamentals for the portfolio,” said Steve Leigh, Managing Director of Global Real Estate for QIC.

“We understand the importance of regional malls to their local communities and have the capability and the capital to evolve these assets into multi-faceted destinations.”

The transaction will be completed in two stages, with the first involving the acquisition of six malls in the states of Colorado, New York, Florida, and Pennsylvania, for net proceeds of $180 million, and the second stage consisting of an option over four more malls in California, Nevada, and Virginia, the fund said in a statement.